Teachers may need bosses to OK loans
Ministry looks to end big debts in profession
Teachers and educational personnel may soon be required to seek prior approval from their superiors in order to borrow money from state-owned banks and cooperatives, according to the Office of the Teacher Civil Service and Educational Personnel Commission (Otep).
Acting secretary-general Athapol Truektrong said Tuesday that Otep is working on solutions to tackle the serious debt problems facing some schoolteachers and educational personnel across the country and has recently come up with an idea that already-indebted teachers should be required to seek approval from their supervisors before they can borrow more money from state-owned banks and cooperatives.
Mr Athapol said that easy access to funds is believed to be the main reason for the debt problems as education personnel are not required to undergo credit checks with the National Credit Bureau (NCB) before borrowing money from the Government Saving Bank's (GSB) loan programme or the Teacher Savings Cooperatives.
Moreover, every teacher who is a member of a teachers' funeral fund, is also allowed to borrow up to 3 million baht even though their salary might be as low as 15,000 baht a month.
"We can't force the banks and cooperatives to tighten criteria for customers who are teachers, so we think we should do it ourselves by requiring superiors to help screen their subordinates' financial discipline.
"For example, if a teacher's debt-to-salary ratio is higher than 80%, they should not be allowed to take on further debt. If superiors give approval to teachers who have a high risk of defaulting and they cannot repay their new debts, they must share the responsibility," he said.
Mr Athapol said Otep plans to propose this idea to Education Minister Teerakiat Jareonsettasin, who is also chairman of Otep's board. However, Otep needs to carefully decide upon suitable debt-to-income ratio criteria first, he said.
"Our teachers' debt problems are becoming overwhelming, therefore we must take a serious look at the issue which, if it remains unsolved, might affect the quality of the country's education system," Otep's acting chief said.
According to the Education Ministry, the total amount owed by teachers to the GSB and various cooperatives is estimated at 1.2 trillion baht.
The GSB alone has lent 410 billion baht to 450,000 teachers or, on average, about one million baht to each teacher. But most teachers also have low-interest loans from other sources such as cooperatives, the teachers' welfare fund and funeral loan schemes. It is estimated that each teacher may be millions of baht in debt.
Gen Kosol Prathumchat, an adviser to the education minister, urged teachers who had borrowed money from the Funeral Service Welfare Fund for Teachers and Education Personnel's loan scheme and who are obliged to reach debt compromises with GSB, to speedily repay their debts.
Citing the GSB's latest report, Gen Kosol said 4,000 "critical" debtors had already reached debt-composition agreements with the bank, while another 16,000 debtors who were about to be sued by the bank had also entered the debt negotiation.